Another Housing Crash

[Mr Rex]

What insight!

 

[djd09]

"Just 11 years after the last housing bubble burst, the United States is in the midst of yet another boom — both caused by errant federal housing policy and inflated by regulatory malpractice.

For decades, Congress has mandated any number of credit-easing policies because they appear to make buying a home more affordable at seemingly no cost. But, as the last housing bust proved, there is no free lunch. These mandates result in unsustainable price increases and price volatility by increasing demand when supply is constrained. This same process is being repeated today. But the cost is anything but free as these mandates make housing less affordable and promote instability.

Regulators enforce these mandates by requiring agencies like the government-sponsored enterprises Fannie Mae and Freddie Mac to loosen credit standards in order to garner more business with higher-risk borrowers. In the last boom, the Department of Housing and Urban Development forced the GSEs to compete for subprime borrowers with both the Federal Housing Administration and private lenders."

https://www.americanbanker.com/opinion/regulators-are-fueling-another-housing-boom

Order out of chaos.

 

[Joe Flacco]

Rent, crash, buy again.

Alternate scenario is rent, prices keep going up, you assed out.

 

[Randolph Kinney]

These sellers have to buy another home.......at top of the market prices. They can cash out but they can't replace the home for the same money.

Sure they can and cheaper too. It is called ... moving to a lower cost of living area.

One thing about population migration, it is slow but it is cumulative, meaning the net flow is either in or out.

 

[Randolph Kinney]

Every year, about 10 million Americans move from one county to another. Migration rates vary by age, race, and ethnicity and with local and national social and economic conditions over time. Still, individual counties' patterns of age-specific migration tend to be consistent over time telling demographic stories about local places. This website highlights these stories by providing reliable estimates of net migration broken down by age, race, Hispanic-origin, and sex for all U.S. counties each decade from 1950 to 2010.

Click on the tabs below to make maps and charts that allow you to visualize migration patterns. Charts make it easy to compare migration patterns over time within a single county or to compare patterns in two or three different counties for the same decade. Maps show how counties across the country compare to one another. The data download tab allows you to download migration data as well as census data for your own analysis.

http://www.netmigration.wisc.edu/

 

[Overimprovement]

Another item to consider, if rents on SFR ( not multi) get high enough, I imagine at some point the HBU for homes in that area would then become income-producing, right? I mean if I can easily rent a home for $1400/month and my all in payment is $1000, why wouldn't I buy every house I can and just rent it out? I am gaining home appreciation values as my mortgage balances decrease as well.

 

[djd09]

A recent report by CoreLogic revealed that U.S. home values appreciated by more than 37% over the last five years. Some are concerned that this is evidence we may be on the verge of another housing “boom & bust” like the one we experienced from 2006-2008.

Recently, several housing experts weighed in on the subject to alleviate these fears.

Sean Becketti, Freddie Mac Chief Economist
“The evidence indicates there currently is no house price bubble in the U.S., despite the rapid increase of house prices over the last five years.”

Edward Golding, a Senior Fellow at the Urban Institute’s Housing Finance Policy Center
“There is not likely to be a national bubble in the way that we saw the first decade of the century.”

Christopher Thornberg, Partner at Beacon Economics
“There is no direct or indirect sign of any kind of bubble.”

Bill McBride, Calculated Risk
“I wouldn’t call house prices a bubble.”

David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices
“Housing is not repeating the bubble period of 2000-2006.”

https://www.keepingcurrentmatters.com/2018/03/08/a-new-housing-bubble-formingnot-before-2024/

Rinse, repeat, recycle. PR 101.

 

[djd09]

Wow higher rents will cease any bubbles. Some one call Greenspan or Bernake and tell the news. I'm starting to think some posters live in a bubble.

 

[djd09]

The student loan problem in America is most often referred to as a crisis. Although this is an apt description, “crisis” usually means something terrible but short-lived. But in the case of excessive student loan debt, the opposite is true. For many young adults, this burden is going to affect them in negative ways throughout their entire lives. The worst impacts may not even be visible now, but will be felt by borrowers as they get older, have families, and especially when they face retirement.

The value of outstanding student loans has tripled over the past decade to over $1.4 trillion as education costs have skyrocketed. Despite a healthy economy and a recovering job market, more than 8.5 million borrowers are now in default, representing over 10 percent of all loans. This is higher than the default rates on credit cards, auto loans, home equity loans, and mortgages, according to recent data from the Federal Reserve Bank of New York.

https://www.the74million.org/articl...rt-them-and-this-country-for-decades-to-come/

No worry. Fannie will look the other way. hahaha

 

[Randolph Kinney]

Wonder what rising interest rates will do for demand? Those with debt will suffer the most.